The TSX Index rally may have slowed, but there are certain names in the Canadian stock market that seem difficult to stop in their tracks. Shopify (TSX:SHOP) and Alimentation Couche-Tard (TSX:ATD) have been on very impressive rallies of late. Even as markets turn lower over the nearer term, the following names may be worth consideration, as they look well positioned to continue outpacing the broader markets.
Without further ado, let’s give the following momentum plays a look to see where they stand and if they’re worth picking up, even after their latest surges toward 52-week highs.
Shopify
Shopify is an e-commerce darling that’s difficult to ignore following its big earnings beat. The stock surged nearly 40% in three trading sessions before cooling off on Tuesday, falling just 0.5%. Looking ahead, Shopify could stand to benefit from cost-saving initiatives and the sale of its logistics business. Further, Shopify is one of the many companies that could be exploring artificial intelligence (AI) technologies to help drive sales and profitability over the long haul.
In a prior piece, I’d highlighted Shopify’s product description tool, which harnessed the power of AI to help improve the overall experience. Such a tool is by no means a game changer. However, I think Shopify is one of the firms that could benefit greatly from the rise of AI tools, especially if it chooses to go down the route of chatbots. These days, so many firms are looking at tailored language models. I think Shopify could go down the same route, as it looks to help improve the relationship between merchants and their customers.
Shopify stock recently got slapped with a downgrade by Atlantic Equities. The stock has run up too fast. I understand where the downgrade is coming from. However, I do think Shopify is a name to watch in case a pullback to more reasonable levels does happen. Indeed, there’s a lot of excitement baked in after the firm’s latest quarter.
Alimentation Couche-Tard
Alimentation Couche-Tard is a convenience store company that’s been rolling higher lately. At $68 per share, the stock is flirting with all-time highs. Despite soaring 60% in two years, Couche remains more of a value play than a growth play with a price-to-earnings multiple below the 18 times mark.
In recent months, Couche has begun to put its cash and credit to work, scooping up the assets of Total Energies in a deal worth US$3.3 billion. More recently, Couche bought another 112 gas stations and convenience stores in the U.S. region from MAPCO Express.
As Couche-Tard gets more active again now that retail valuations are tamer, I think the stock has significant runway from here. As earnings continue surging higher, Couche-Tard stock may be in a spot to get cheaper, even as it rises in price. Indeed, Couche-Tard stock still seems like one of the best picks for the next 15 years and beyond.
Better buy: Shopify or Couche-Tard?
Couche-Tard seems like the better buy at today’s slate of prices. Shopify has had a hot run and could be in for a bit of a dip. If it does dip, I’d give the name a second look. For now, Couche-Tard seems like the perfect mix of value, growth, and momentum. As you may know, I’m also a big fan of management.
